Michigan Court of Appeals; Docket No. 178085; Published
Judges Saad, Corrigan, and Benson; Unanimous; Opinion by Judge Saad
Official Michigan Reporter Citation: 221 Mich App 330; Link to Opinion
Uninsured Motorist Benefits
Private Contract (Meaning and Intent)
In this published Opinion authored by Judge Saad, involving a coverage dispute between two insurers, the Court of Appeals held that the insurer of a person injured through the fault of an uninsured motorist is not obligated to pay uninsured motorist benefits under the terms of its policy, where the injured person is also subject to uninsured motorist coverage under a policy issued on the car in which she was driving. The court's holding in this regard turned upon the language contained in the injured person's policy.
Sharilyn Kesten was a passenger in a car driven by Debra Carpenter, which was struck by an uninsured motorist. Carpenter's car was insured by American States Insurance Company under a policy that provided for uninsured motorist coverage. Kesten and her husband also held a policy on their own automobile, issued by ACIA, which also included uninsured motorist coverage. The ACIA policy with respect to uninsured motorist coverage, provided for the following exclusion:
"The coverage does not apply to bodily injuries sustained by an insured person:
* * *
while occupying a motor vehicle which provides the same or similar coverage for you or a resident relative."
The circuit court found this exclusion contained in ACIA's policy to be inapplicable, and thus found ACIA liable for $20,000 of uninsured motorist coverage.
The Court of Appeals reversed and found that since the American policy provided the "same or similar" coverage as the ACIA policy, the quoted exclusion operated to preclude the payment under the ACIA policy. The court rejected American's argument that because its policy had a $100,000 limits of liability, while ACIA's limit was $20,000, the coverage was not the "same or similar," finding that the type of coverage was the same and only the amount of coverage was different.